Halifax Redemption Administration fee

Woody

Hi,
I am looking for some advice. I have had a mortgage with the Leeds (which turned into the Halifax) since 1992. Recently came off a fixed rate, and - as has been mentioned here many times, the Halifax act like that Nationwide advert when you visit them to try and do a deal.

It just so happens that I bank with First Direct, who have extended the offer of no fees to transfer to an offset mortgage - so I would like to do this, if only to be able to completely sever my ties with the Halifax.

Halifax now tell me, that although I am just on their standard variable rate on a bog-standard mortgage, they are going to charge me an admin fee of £175 to close my mortgage PLUS a £50 fee for handing over the deeds.

I have no problem with the deed handling fee, and while an additional £175 might still be good value for the ability to put Halifax well and truly behind me, I am puzzled as to where this amount has come from or Halifax's right to charge me - particularly given how much money they have made out of me over the years.

I have checked all my paperwork for the original Leeds mortgage and all my Halifax statements, but nowhere can I see any mention of this redemption Administration fee - which seems arbitrary and a restraint on trade - by stopping people moving mortgages to better/cheaper suppliers.

Can anybody advise me what the deal is with this £175 redemption fee - is it a new thing, or has it always been part of the mortgage terms - even from Leeds Permanent days? (I know I'm showing my age here....).

All advice much appreciated - thanks.

AndrewSmith

Basically you have 3 choices.

1) Argue the case with them and see if they will waive it
2) Pay it
3) Stay with them as a borrower

I would suggest you do stage 1 before considering the other 2.

Noz

i found that the £175 & £50 were listed on annual statements under Redemtpion Details section in past experience


(I'm going from memory so the named section may not be quite correct)

Mine's_a_guinness

I recently contacted the Halifax regarding this as we are looking to remortgage. When we originally took out our mortgage 4 years ago the administration fee to move the mortgage elsewhere/complete mortgage early was only £75 and I asked how they could justify such a large increase in such a short space of time. They couldn't give me an answer for the increase but said the reason they charged it was that I was breaking the terms and conditions of my mortgage by not keeping the mortgage for the full term. To me this seems more like a hidden redemption charge than an administration fee.

Woody

Noz wrote:

i found that the £175 & £50 were listed on annual statements under Redemtpion Details section in past experience

Noz,
Now you are on to something! Thanks.

Just checked and:

On my 2004 statement - it says "Please note a repayment fee is payable if you wish to pay off all or part of your mortgage...." - which is as to be expected, because I was on a 5 year fixed rate.

On my 2005 statement (while I was still on the fixed rate) - this time it quoted:

a) An early repayment charge.

AND

b) Repayment administration fee of £175
c) Deeds despatch fee of £50

So, it looks like they "invented" the Repayment Administration Fee for me some time in 2005 - that smells like a change in contract terms to me....

Noz

I'm not quite sure about that, I know other Halifax customers have complained becuase the fee has increased over time - so the fee itself has existed in some shape or form for a good number of years

Having said this, I'm going by other threads, i could be confusing lenders

regularsaver1

most lenders charge a fee to leave now

A&L charge £295 - best to check with first Direct for later

TangentMan

It could be a change in contract terms. Your mortgage was originally with the Leeds, you might have inherited a Halifax charge when they merged.

But, unless the Leeds has a similar fee i can't see how the Halifax can charge you it (you can argue about value later).

Now, the trick is, what there the corresponding fees at the Leeds when you took out your mortgage?

Woody

TangentMan wrote:

Now, the trick is, what there the corresponding fees at the Leeds when you took out your mortgage?

Good point. Nothing on my Leeds documentation specifies a Redemption Admin fee - just an early repayment penalty because it was a 10% - 11.5% "Cap and Collar" mortgage. Ouch! Yes, really 10% - heady days....

I think I am just going to need to get shot of this Halifax mob - whatever it costs and argue afterwards.